Dogecoin, XRP Fall as Traders Cash Out Ahead of Upcoming Inflation Figures on Friday

Market participants are now closely watching Friday’s Core PCE inflation data, a critical indicator for the Federal Reserve’s monetary policy decisions, analysts say.

Bitcoin (BTC) dipped about 1% over the past day, while XRP (XRP) and Dogecoin (DOGE) both declined roughly 2.5%, pointing to a cautious recovery rather than a full rebound in the crypto space.

Last week’s volatility was triggered by U.S. President Donald Trump’s proposal to raise tariffs on European goods from 20% to 50%, which rattled risk markets, including cryptocurrencies.

“Bitcoin’s price bounce followed Trump’s announcement to delay the tariff hike, which had initially spooked investors over the weekend,” noted Jeffrey Ding, chief analyst at HashKey Group, in a Telegram message to CoinDesk.

“Traders welcomed the move as a sign of stabilizing conditions, spurring risk-on sentiment, especially with MicroStrategy’s Michael Saylor hinting at further Bitcoin buys,” Ding added.

On Monday, Trump announced a postponement of the new tariffs until July 9 after a positive discussion with European Commission President Ursula von der Leyen, calming markets further.

Yet Singapore-based QCP Capital cautioned that this episode underscores how quickly market calm can unravel amid policy surprises.

The spread in implied volatility between July and June Bitcoin options, which spiked above 2 vols last week, has narrowed below 1, signaling traders’ anticipation of another pivotal event near the tariff deadline.

This volatility differential reflects market expectations of future Bitcoin price swings, showing a more cautious stance ahead.

Attention is now fixed on the upcoming Core PCE report, which excludes volatile food and energy prices and serves as a key measure for the Fed’s inflation outlook.

Despite ongoing uncertainties, institutional inflows remain robust, with BlackRock’s IBIT ETF posting 30 consecutive days of net inflows — a rare streak reflecting strong demand from large investors.

However, QCP noted a divergence between crypto and traditional tech assets, as flows in leveraged tech ETFs like the TQQQ have cooled while crypto has maintained relative strength.

“In an environment of unpredictable policies,” QCP concluded, “crypto continues to act as the dependable asset class at the table.”